Here's WPP's Profit On The Sale Of Buddy Media

Lazerow and Sorrell
BI / WPP
WPP gave us a bit more detail today on how much money it made from its $5 million stake in Buddy Media when the company was acquired by Salesforce (and renamed Marketing Cloud). It said:

The proceeds from the sale of the company's stake in Buddy Media have now been received. In addition, conditional contracts with an escrow have been exchanged with a prospective buyer for the sale of the freehold of 285 Madison Avenue, the New York headquarters of Young & Rubicam Inc. The sale should be completed shortly. Together, these two transactions should yield an exceptional cash gain of well over $100 million.

Separately, Salesforce noted that Buddy Media had one customer with whom it had a "volume-based incentives" scheme for doing business with Buddy Media. That customer earned $7 million in "warrants" under the scheme, and had placed $1.9 million in business through Buddy Media in 2012, or 10 percent of the company's entire business.

That would probably make "the customer," as Salesforce described it, one of Buddy Media's largest. WPP, of course, is the largest ad agency company in the world. Could WPP have a volume discount agreement with Buddy Media?

A spokesperson did not immediately respond to a request for comment; Buddy Media has previously declined to elaborate on the details behind its volume discount scheme.

Regardless, that customer appears to have a very sweet deal. Buddy Media recorded a $2.2 million expense for servicing the $1.9 million in business the deal generated.